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V1668-21 31 May 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos de actividades económicas

Flat-rate RETA subsidy is taxable as income from economic activity for IRPF purposes

A self-employed individual requested clarification on how to tax a subsidy from the Community of Madrid for the extension of the RETA flat-rate scheme. The DGT ruled that it constitutes income from economic activity and must be recognised according to either the accrual or cash basis.

The question raised

Taxation of the subsidy in the Personal Income Tax (IRPF).

The DGT's ruling

The subsidy intended to finance RETA contributions is classified as a current subsidy and, therefore, as income from economic activity. It must be attributed to the tax period in which it accrues, which occurs when it is administratively approved and granted. If the taxpayer opts for the cash basis, it will be attributed in the period in which the collection occurs.

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